What the Google is Going On?

This post needs to start with an unabashed statement – I am a fan of Google. I’ve met many of the top people there, and I have been blown away by the consistent level of brilliance among them.

That is why I am so bothered by the direction that the company seems to have recently taken, and that track seems to be personally directed by the CEO, Eric Schmidt.

I’d provide an item-by-item list of disturbing recent statements by Google executives and actions by the company, but Silicon Alley Insider has already done so much more eloquently than I would be able to. I highly recommend their article, reprinted below in its entirety. See the article at the Silicon Alley Insider site here.

The 6 Delusions Of Google’s Arrogant Leaders

Google’s CEO went to Abu Dhabi this week and preached. He sermonized about Google’s exceptional virtue — its indifference to profit and supreme trustworthiness. His speech should have been shocking. Except that delusional self-righteousness is now routine at Google.

Eric Schmidt‘s comments at the Abu Dhabi “media summit” certainly sound especially cocky even considering the Google CEO’s past haughty pronouncements. Schmidt,Fortune reports, implied Google is more trustworthy than any government on the planet after he was was asked asked about the company’s worrisome stash of private data on its users, Schmidt :

“All this information that you have about us… Does that scare everyone in this room?” The questioner asked… “Would you prefer someone else?” Schmidt shot back… “Is there a government that you would prefer to be in charge of this?”

Schmidt also said Google has been known to curb its own creepy impulses:

“There are many, many things that Google could do, that we chose not to do… One day we had a conversation where we figured we could just try to predict the stock market. And then we decided it was illegal. So we stopped doing that.”

Fortune wonders if Schmidt’s comments are a sign of “a dangerous culture of self-righteousness.” They are.

But the CEO’s remarks are just the latest in a series of prominent self-righteous statements from Googlers. There have been plenty of similar cases just in the past couple of months alone. It’s worth cataloging them, given Google’s deep relationship with its millions of users, and given that the Mountain View internet company doesn’t seem to be getting any more humble.

Delusion 1: It’s not about the money

In Abu Dhabi, speaking to a diverse international audience, Schmidt said Google “sees itself really differently from other companies” because “we see ourselves as a company with a mission about information and not a mission about revenue or profits.”

Here’s what Schmidt said to a different crowd, of Wall Street analysts, in an October conference call: “We love cash.” That’s the full sentence he uttered. He had nothing to say on the call about Google’s noble information “mission.

Come on, St. Eric: Google did not make $15 billion in profits over the past year on accident. The company exists to make money for its investors and executives. Period. And that’s not something you’d have to apologize for if you’d drop the old saw about how Google is too virtuous to chase money and how it really just wants to make us all smarter.

It’s a truly bizarre moment, in which Cutts defends some horrendous management decisions based on Wall Street trades. If the last two years have taught this country anything, it’s that the connection between stock performance and executive competence is pitifully weak.

Yet Cutts is hardly alone in revering Google’s financials. Schmidt looked at Google’s unexpectedly strong third-quarter profits and said they made him “very optimistic now about the future,” gave him “the confidence to be optimistic about our future” and made him “very, very happy with Q3.” After a blowout fourth quarter Schmidt said “we are back in business full blast.”

But at Google financial gains have not been correlated with innovation. The company still gleans nearly all its profits from its core, longstanding contextual advertising business; its many many side projects and acquisitions add little to the bottom line. So Google shouldn’t get too excited to see its stock is up 77 percent the past year versus 59 percent for the S&P 500, or to be accelerating its hiring while national unemployment is stuck at 10 percent.

Profits do not mean you’re connecting with users’ most pressing needs. If that were the case then Microsoft, flush with revenue from its old-line Office and Windows businesses to this day, would have clobbered Google in Web search years ago.

Delusion 3: Google must sacrifice user privacy to grow

Google wanted a big debut for Google Buzz, its attempt to copy the likes of Twitter and FriendFeed. So it bypassed an established “beta” testing system and launched Buzz with no external trials. It also built Buzz into GMail to get more users. This ended up screwing users over on privacy; Buzz was automatically sharing their lists of most-emailed friends with the world.

And yet Google’s contrition has been limited. The company response boils down to, “well that’s unfortunate but it’s also the way the world works now.”

What we’re going to have to come to terms with is this stuff happening more. I honestly don’t think it’s a bad thing for people to be exposed to the issues this way.

So terrible privacy violations like sharing your location and work address with an abusive ex-husband and other unauthorized parties are the necessary costs of progress and not “a bad thing,” according to one of the key engineers behind Google Buzz. In fact, they are learning experiences.

Engstrom said this, by the way, on the same podcast where the abusive ex-husband was discussed, so it’s not like he didn’t grasp the full implications of what had happened.

But he was hardly alone in framing privacy abuse as inevitable and necessary. In a later podcast, Cutts said that while Buzz perhaps needed more testing, rapid deployment allowed Google to get rapid feedback on Buzz and “iterate” quickly and “try out a lot of different things” (see latter half of clip above).

Translation: It’s very effective for Google to use the actual relationships of actual humans to test unproven social networking code. And conveniently, Google doesn’t have to endure the sometimes painful cost of this testing!

Of course, there’s a more ethical alternative: Use consenting beta testers like the “Trusted Testers” Google has already organized to test innovative social products, rather than rushing into something to get big fast.

Delusion 4: Users are hungry for Google synergy

When Google launched Buzz, it thought people would by dying to see the product pop up all over the place: in Google GMail, Google Maps even Google search. Google VP Vic Gundotra openly talked about using those properties to promote Buzz in an interview with Silicon Valley blogger and startup advisor Louis Gray. See the short clip above.

But this sort of integration proved to be Buzz’s biggest weakness: The combination of Buzz and Gmail cluttered up people’s inboxes and, quite controversially, made it possible for Buzz to compromise users’ privacy by combing their email logs. Google should have known such deep integration would be a bad idea because, as we noted the day Buzz launched, the company experienced a very similar controversy when it hooked Google Reader up to GMail two years ago.

It seemed unfair and sleazy, not convenient, when Microsoft started using its operating system to promote its online services, streaming media technologies and Web browser. Google isn’t quite as suspect as Microsoft but, in the eyes of the public, it’s increasingly getting close. Especially when it comes to search. And the public will be increasingly hostile to Google product bundles that are more about promotion than functionality.

Whenever Google’s actions spark criticism, the first response of the self-regarding Google priesthood seems to be to insist the critics are simply bewildered at the company’s complicated brilliance.

For example, in December Schmidt made a rather chilling statement on CNBC about secrets (which we were the first to highlight): “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” The quote set off a firestorm of controversy.

Google rather absurdly argued that Schmidt had been misunderstood and taken out of context; in astatement circulated at the time its flacks claimed Schmidt was “talking about the US Patriot Act.” Sure he was — after he gave his little lecture about the villainy behind secrets. There’s plenty of context in the video clip we ran, reproduced above.

Schmidt also absurdly claimed to be misunderstood over Google Buzz. Speaking at the Mobile World Congress in Barcelona a couple of weeks ago, Schmidt went so far as to falsely deny any privacy breach occurred with Buzz, saying in effect that users were hysterical:

“People thought that somehow we were publishing their email addresses and private information, which was not true [it was]… It was our fault that we did not communicate that fact very well, but the important thing is that no really bad stuff happens in the sense that nobody’s personal information was disclosed [it was].”

Schmidt was right that there’s a lot of confusion around Google. Unfortunately for him, much of that confusion seems to originate in the company itself. Hopefully the Todd Jacksons of the company will have a chance to educate their peers on the realities of life outside the Googleplex. Eric Schmidt included.